Contempt of court case against Dave King to proceed after judge rejects Rangers chairman’s competency challenge

The petitioner, the Panel on Takeovers and Mergers had asked Court of Session to punish the respondent Dave King for his failure to obey orders obliging him to make a “mandatory offer” having already obtained a 30% shareholding in the company, but the Rangers chairman claimed that the application was “incompetent” because the panel had failed to obtain the concurrence of the Lord Advocate.

However, Lady Wolffe ruled that the respondent’s challenge “without merit”.

The court heard that the petitioner lodged an application asking the court to find the respondent guilty of contempt of court by reason of his failure to obtemper the court’s interlocutor of 22 December 2017, as confirmed and varied by the interlocutor dated 28 February 2018 of the Inner House after his appeal was refused.

The order required him to make a mandatory offer in accordance with the City Code on Takeovers and Mergers, at 20p per share, for all of Rangers’ issued share capital not already owned by him or by his company New Oasis Asset Limited - which amounted to £11 million.

But the respondent argued that the panel was obliged first to obtain the concurrence of the Lord Advocate to the raising of these proceedings, and that in the absence of that concurrence the application was incompetent.

It was argued that, historically, all cases involving a contempt of court required the prior concurrence of the Lord Advocate because of the “penal character” of the consequences of a contempt.

In any event, it was also submitted that proceeding by minute was incompetent, as the application required to be by petition and complaint to the Inner House, although this argument was not advanced.

In response to the concurrence challenge, the panel argued that the modern law was that the concurrence of the Lord Advocate was required only in proceedings for contempt of court for “breach of an interdict”.

Accordingly, no concurrence was required in proceedings for contempt of court for breach of a “positive order” such as that imposed on the respondent by the court.

In relation to the procedural argument, the panel submitted that proceeding by minute was “competent”.

Having considered the authorities, the judge concluded that there was “no merit” in the respondent’s concurrence argument, as breaches of interdict were regarded as a “distinct class of contempt with a special rule”.

In a written opinion, Lady Wolffe said: “While breach of interdict is a species of contempt of court, it is clear on the authorities that the courts have consistently distinguished that form of contempt from others.

“No case was cited in which the Lord Advocate’s concurrence was required to a contempt of court involving an order which was not an interdict.

“The policy rationale…has nothing to do with the ‘penal’ character of contempt of court proceedings generally. There is, in my view, no justification for extending the rule…”

In orbiter remarks addressing the procedural argument, the judge observed that the respondent’s reliance on section 47(1) of the Court of Session Act 1988 and Rules of Court were of no assistance.

Lady Wolffe added: “It respectfully seems to me that, in the absence of a prescribed procedure in rule, statute or established practice, the court should adopt a similar flexibility to deal with contempts of court committed outwith the court, so long as the procedure adopted is fair and has the usual safeguards.

“This is consistent with the court’s inherent jurisdiction and furthers the very purpose (including the ‘speedy and effectual advancement of justice’) for which this power is exercised. In the instant proceedings, a very full procedure has been adopted: the respondent has had due notice of the alleged contempt (in the form of the minute) and has had opportunity to respond (in the form of answers).

“Further, the proof to follow will be indistinguishable from a full proof in a commercial action and all of the procedures, safeguards and formalities that that entails. In my view, the procedural argument is without merit.”